Homeowners insurance can serve as a vital lifeline when your home’s exterior or interior — including furniture and other assets — becomes damaged. Beyond physical damage to property, affordable homeowners insurance can also reimburse you for theft or injury that occurs in the home.
Renters insurance is similar but does not provide reimbursement for physical property damage, only for the renter’s personal assets. Both forms of insurance can be absolutely essential to your long-term financial wellbeing. As with any expenditure, though, you’ll want to make sure you’re paying as little as possible without sacrificing on quality. Below, we’ll look at some surefire ways to save money on either your homeowners or renters insurance.
First, the most obvious tip – don’t just opt for the first insurance company that seems to provide a good offer. Do your research!
You should first determine how much coverage you need. For homeowners insurance, the lowest amount of coverage you should have is the amount it would take to rebuild your home. How can you possibly determine this?
Well, it’s not as hard as it sounds: take the square footage of your home and multiply this by local construction costs (which you can find on websites of construction companies in your area). Alternatively, you can simply Google “home reconstruction cost calculator” and utilize one of many free resources.
This is important to do so that you can compare costs from company to company for the same amount of coverage.
To compare renters insurance, first add up the cost of your belongings, or at least those belongings that you’d absolutely want to be covered. You should compare not only personal property coverage but also liability coverage (reimburses you for injuries that take place in your apartment) and loss of use coverage (i.e., whether or not the provider will reimburse you for a stay in a hotel if your apartment is unavailable).
Now that we’ve gotten that out of the way, you should look into at least three (preferably four or five) insurance companies for quotes.
Use Google or talk to friends and family members to find good insurance companies. You could also hire an insurance agent who can compare costs for you, though this isn’t necessary unless you really feel you have no idea what you’re doing.
For renters insurance, also be sure to understand the difference between actual cost value and replacement cost coverage: basically, actual cost value coverage will take the age of the item destroyed or stolen into account, and so pay out a depreciated rate, whereas replacement coverage will not.
To give you an idea of what to aim for, the average homeowner’s insurance premium is $1,899 in 2023, and the average renter’s insurance $179 per year.